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2020 (11) TMI 123 - Tri - Insolvency and BankruptcyExtension of CIRP period for a further period of 90 days in order to complete CIRP process - Regulation 36A of IBBI (Insolvency Resolution of Corporate Persons) Regulations, 2016 - HELD THAT - In view of the fact that there is only one Prospective Resolution Applicant before the Committee of Creditors as on date and the time to examine the resolution plan under the Code and verification of the contents of the resolution plan is limited, and also the intention of the Committee of Creditors to invite fresh Expression of Interest to enable more bonafide resolution applicants to bid for the revival of the Corporate Debtor seems to be reasonable, the request of Resolution Professional to extend the CIRP period for a further period of 90 days is justifiable. Application allowed.
Issues:
Extension of Corporate Insolvency Resolution Process under Section 12(2) of IBC 2016, permission to invite fresh Expression of Interest under Regulation 36A of IBBI Regulations, applicability of Regulation 40C in light of lockdown, due diligence of Prospective Resolution Applicant under Section 30 of IBC 2016, compliance with Regulation 39(4) for submission of Resolution Plan, extension of CIRP period by Committee of Creditors, invitation of Fresh Expression of Interest, justification for extending CIRP period. Analysis: The judgment arose from an application under Section 12(2) of IBC 2016 seeking an extension of the Corporate Insolvency Resolution Process (CIRP) by 90 days to complete the resolution process and invite fresh Expressions of Interest (EOI) under Regulation 36A. The Resolution Professional (RP) requested the extension due to various factors, including lockdown implications and the need for due diligence of the Prospective Resolution Applicant as per Section 30 of IBC 2016. The RP had previously sought reinstatement of the CIR Process under Regulation 40C due to lockdown effects, which was granted, extending the CIRP period. Subsequently, the RP submitted that a Resolution Plan had been received from an eligible Resolution Applicant, necessitating due diligence and compliance with Section 29A for approval by the Committee of Creditors (CoC). The RP faced practical difficulties in complying with Regulation 39(4) for submitting the Resolution Plan to the Adjudicating Authority within the specified time frame. The CoC, recognizing the time constraints, passed a resolution to extend the CIRP period by 90 days to facilitate a thorough evaluation of the Resolution Plan and the possibility of inviting fresh EOIs. Considering the limited time for examination and verification of the Resolution Plan, the Tribunal found merit in the RP's request for a 90-day extension. The decision was based on the RP's submissions, the CoC's resolution, and the need to allow more bonafide Resolution Applicants to participate in the revival of the Corporate Debtor. Ultimately, the Tribunal allowed the extension of the CIRP period by 90 days, directing strict adherence to IBBI Rules and Regulations for completion by a specified date. Additionally, the RP was permitted to invite fresh EOIs during the extended period if the current plan under consideration by the CoC was rejected. The judgment highlighted the importance of facilitating a fair process for Resolution Applicants and ensuring the best interests of the Corporate Debtor in the resolution proceedings.
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